HomeMy WebLinkAbout2012-019 EDAR Commissioner Kay Lasman introduced the following resolution and moved
its adoption:
EDA RESOLUTION NO. 2012-19
RESOLUTION APPROVING AN NSP 3 FIRST LOOK PROGRAM ACQUISITION
AGREEMENT
BE IT RESOLVED By the Board of Commissioners (the `Board") of the Economic
Development Authority of the City of Brooklyn Center("Authority")as follows:
WHEREAS, the City of Brooklyn Center ("City") was the sub-recipient of
Neighborhood Stabilization Program III ("NSP 3") funds from Hennepin County ("County") for
use within certain approved areas within the City of Brooklyn Center. The City authorized the
Authority to act on its behalf to implement the terms of the sub-recipient agreement with the
County and to award NSP 3 program funds to certain developers ("NSP 3 Developers") for the
purposes of purchasing and redeveloping properties that have been demolished or are vacant
("Category E Properties"); and
WHEREAS, the Twin Cities Community Land Bank, a Minnesota nonprofit
organization ("TCCLB") and the Authority are parties working with the National Community
Stabilization Trust LLC, a Delaware limited liability company("NCST"), which allows the TCCLB
to purchase NSP 3 Category E Properties through NCST prior to these properties being placed on
the open market in order to facilitate a significant purchase price adjustment for the benefit of the
TCCLB ("First Look Program"). Upon the direction of the Authority, TCCLB intends to
purchase certain properties and offer them for sale to the Authority and to the NSP 3 Developers;
and
WHEREAS, the TCCLB and the Authority desire to enter into a First Look Program
Acquisition Agreement to satisfy the requirements in 24 CFR 570.203 and the U.S. Department
of Housing and Urban Development's Guidance issued on April 23, 2009 titled "Guidance on
NSP-Eligible Acquisition and Rehabilitation Activities" that clarifies the use of intermediaries
for acquisitions under NSP. Pursuant to this HUD Guidance, the Authority must enter into an
agreement with the TCCLB, an intermediary, prior to the acquisition of eligible properties by the
TCCLB in order for the properties purchased by the Authority or NSP 3 Developers retain their
eligibility for NSP 3 Funds; and
WHEREAS, the Greater Metropolitan Housing Corporation ("GMHC") was among
the companies that submitted applications to participate in the Authority's program to utilize
NSP 3 Funds and was identified by the Authority as the best suited to meet the Authority's
policy objectives and program goals, and as such is an NSP 3 Developer for the Authority; and
WHEREAS, the Authority proposes to enter into a First Look Program Acquisition
Agreement with TCCLB (the"NSP 3 Acquisition Agreement"); and
Authority Approval; Further Proceedings.
EDA RESOLUTION NO. 2012-19
WHEREAS, the Amendment and the NSP 3 Acquisition Agreement as presented to
the Board are hereby in all respects approved, subject to modifications that do not alter the
substance of the transaction and that are approved by the City Attorney and the Executive Director
of the Authority; provided that execution of the NSP 3 Acquisition Agreement by the President and
the Executive Director shall be conclusive evidence of approval; and
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center,
The Amendment and the NSP 3 Developer Agreement as presented to the Board are hereby
in all respects approved, subject to modifications that do not alter the substance of th e transaction
and that are approved by the City Attorney and the Executive Director of the Authority; provided
that execution of the Amendment and the NSP 3 Developer Agreement by the President and the
Executive Director shall be conclusive evidence of approval; and
The President and the Executive Director are hereby authorized to execute the Amendment
and the NSP 3 Developer Agreement on behalf of the Authority and to carry out on behalf of the
Authority's obligations thereunder.
Approved by the Board of Commissioners of the Economic Development Authority of the
City of Brooklyn Center this 8 day of October,2012.
October 8 2012
Date President
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Dan Ryan
and upon vote being taken thereon, the following voted in favor thereof:
Tim Willson, Carol Kleven, Kay Lasman, Lin Myszkowski, and Dan Ryan;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
EDA RESOLUTION NO. 2012-19
FIRST LOOK PROGRAM
ACQUISITION AGREEMENT
(NSP 3)
THIS FIRST LOOK PROGRAM ACQUISITION AGREEMENT ("Agreement") is
made as of this eight day of October, 2012 ("Effective Date"), by and between the Twin Cities
Community Land Bank LLC, a Minnesota nonprofit limited liability company ("TCC Land
Bank"), and the Economic Development Authority of the City of Brooklyn Center, a public
body corporate and politic under the laws of the State of Minnesota, having its principal office at
6301 Shingle Creek Parkway, Brooklyn Center, Minnesota("EDA").
RECITALS
A. Title III of Division B of the Housing and Economic Recovery Act of 2008 (Pub. L 110-
289, 1222 Stat. 2654 enacted July 30, 2008), ("HERA"), as amended, and an additional
allocation of funds provided under Section 1497 of the Wall Street Reform and
Consumer Protection Act of 2010 (Pub. L. 111-203, approved July 21, 2010) (the "Dodd-
Frank Act") for additional assistance in accordance with the second undesignated
paragraph under the heading "Community Planning and Development - Community
Development Fund" in Title XII of Division A of the American Recovery and
Reinvestment Act of 2009 (Pub. L. 111-5, approved February 17, 2009) (the "Recovery
Act" and collectively, the "Act") makes available to qualified entities certain qualified
grant funds termed Neighborhood Stabilization Program funds ("NSP 3 Funds") under
the CDBG Neighborhood Stabilization Program 3 ("NSP 3").
B. Hennepin County ("County") received a grant of NSP 3 Funds directly from the United
States Department of Housing and Urban Development ("HUD") and as a recipient of
funds the State of Minnesota Housing Finance Agency ("MHFA") received directly from
HUD, both under the Act.
C. The City of Brooklyn Center ("City") is the sub-recipient of NSP funds from County in
the amount of$1,177,750 ("NSP 3 Award") for use within certain approved areas of the
City ("NSP 3 Eligible Area") plus $25,000 for administrative expenses, as set forth in the
City's agreement with County for the NSP Sub-Recipient Grant approved by the
Hennepin County Board of Commissioners on April 26, 2011, pursuant to County
Resolution 11-0153 and City Resolution 2011-108 ("Subrecipient Agreement").
D. City authorized EDA to act on its behalf to implement the CDBG Neighborhood
Stabilization Program under the terms of the Subrecipient Agreement (City Resolution
2010-32). EDA agreed to undertake City's duties under the Subrecipient Agreement
(EDA Resolution 2010-02).
E. EDA has awarded and/or will award the NSP 3 Award to certain developers ("NSP 3
Developers") under its Foreclosure Recovery Program for the purposes of purchasing and
redeveloping properties that have been demolished or are vacant ("Category E
Properties"), which constitute an eligible use of NSP 3 Funds pursuant to § 2301(c)(3)(E)
of the Act ("Eligible Use Category E").
EDA RESOLUTION NO. 2012-19
F. EDA also is undertaking to establish financing mechanisms for the purchase and
redevelopment of foreclosed upon property, which constitute an eligible use of NSP 3
Funds pursuant to § 23 01(c)(3)(A) of the Act.
G. Under NSP 3, properties must have been foreclosed upon to qualify for NSP 3 assistance
under the Act and must have been abandoned or foreclosed upon to qualify for NSP 3
assistance under the Act. Category E Properties shall be individually referred to as an
"Eligible Property" and collectively referred to as "Eligible Properties".
H. On April 23, 2009, HUD issued a document titled "Guidance on NSP 3-Eligible
Acquisition and Rehabilitation Activities" that clarifies the use of intermediaries for
acquisitions under NSP 3 (the"HUD Guidance").
I. The parties shall be working with the National Community Stabilization Trust LLC, a
Delaware limited liability company ("NCST"), and participating sellers under a program
called "First Look ("First Look Program") which allows TCC Land Bank to purchase
Eligible Properties prior to such Eligible Properties being placed on the open market
using standardized transaction formats and pricing models to facilitate a significant
purchase price adjustment for the benefit of TCC Land Bank.
J. TCC Land Bank has signed a Memorandum of Understanding dated September 1, 2009
("NCST MOU') with NCST and has agreed to the Acquisition Program Guidelines
issued by NCST, which is attached to this Agreement as Exhibit A.
K. TCC Land Bank intends to offer for sale certain Eligible Properties it acquires pursuant to
the First Look Program to EDA and NSP 3 Developers, among others, and to retain
certain Eligible Properties it acquires pursuant to the First Look Program for its own
acquisition and rehabilitation program.
L. The purpose of this Agreement is to satisfy the requirements in 24 CFR 570.203 and the
HUD Guidance so that Eligible Properties acquired by TCC Land Bank and purchased by
EDA or NSP 3 Developers retain their eligibility for NSP 3 Funds.
M. Capitalized terms used and not defined in this Agreement shall have the meaning set forth
in that certain NSP 1 Notice published in the Federal Register on October 6, 2008.
AGREEMENT
1. Scope of Work. EDA hereby designates TCC Land Bank as an NSP 3 Subrecipient to
carry out acquisition of Eligible Properties through the First Look Program and in
accordance with the terms and conditions of this Agreement.
2. Term. This Agreement will be effective as of the Effective Date and terminate on
December 31, 2014.
3. Eligible Areas. The maps attached to this Agreement as Exhibit B identify the areas
determined by EDA to be EDA's areas of greatest need.
EDA RESOLUTION NO. 2012-19
4. Other Criteria. EDA shall provide TCC Land Bank with its criteria for Eligible
Properties it would like TCC Land Bank to acquire under the First Look Program and
offer to EDA for rehabilitation under the Foreclosure Recovery Program, such as
location, quality, price and level of needed repairs. It is intended that each of NSP 3
Developers shall provide TCC Land Bank with its criteria for Eligible Properties it would
like TCC Land Bank to acquire under the First Look Program and offer to NSP 3
Developers under the Foreclosure Recovery Program, such as location, quality, price and
level of needed repairs.
5. Timing. Any properties acquired by TCC Land Bank prior to the Effective Date of this
Agreement ("Prior Acquired Properties") may be eligible for rehabilitation under Eligible
Use Category E if HUD grants an exception pursuant to HUD Guidance.
6. URA. TCC Land Bank will cause each NSP 3 Developer to comply with applicable
acquisition and relocation requirements in the Uniform Relocation Act ("URA") and
implementing regulations at 49 CFR Part 24, including, without limitation, the voluntary
acquisition provisions at 49 CFR 24.101(b)(1). Among other things, the URA and 49
CFR Part 24 require TCC Land Bank to document delivery of an informational notice in
substantially the form attached to this Agreement as Exhibit C (HUD Guideform: NSP
Voluntary Acquisition of Foreclosed Property) to each property owner. TCC Land Bank
will acquire only unoccupied properties under the NCST Program and shall certify that
its acquisition of any Eligible Property did not cause a tenant displacement (as described
in the URA). Further, with respect to any property foreclosed after February 17, 2009,
TCC Land Bank must obtain certification from the foreclosing lender that it complied
with the new tenant protections in the American Recovery and Reinvestment Act of 2009
and the Protecting Tenants at Foreclosure Act of 2009 in the form attached as Exhibit D
("PTFA Certification").
7. Purchase Discount. TCC Land Bank shall cause each NSP 3 Developer to obtain a URA-
compliant appraisal (49 CFR 24.103) dated within sixty (60) days before the final offer,
which under the NCST MOU is the date of closing of any applicable Eligible Property,
and obtain a discount from the Current Market Appraised Value for each Eligible
Property of at least one percent (1%). If the anticipated value of the Eligible Property is
$25,000 or less and the acquisition is voluntary, review of available data by a person
qualified to make the valuation may be substituted for an appraisal.
8. Environmental Review. Prior to a commitment of NSP 3 funds or "choice-limiting
action" as described in the environmental regulations at 24 CFR Part 58, EDA will
undertake the appropriate environmental review procedures and documentation.
9. Activity Delivery Costs. TCC Land Bank may incur staff and overhead costs directly
related to carrying out the acquisition activities under this Agreement. Such costs may
include but are not limited to the cost of surveys, appraisals, preparation of legal
documents, recording fees and temporarily managing Eligible Properties ("Activity
Delivery Costs"), provided such costs are necessary and reasonable and otherwise
conform with OMB Circular A-122 Cost Principles for Nonprofit Organizations.
10. Distribution. It is the intent of the parties that Eligible Properties acquired pursuant to
this Agreement will retain their Foreclosed status through any subsequent sales or
EDA RESOLUTION NO. 2012-19
transfers to EDA and/or NSP 3 Developers. TCC Land Bank will follow o the p rocedures
attached to this Agreement as Exhibit E (Acquisition Process) and offer the Eligible
Properties in the following manner:
(a) To EDA
(i) Purpose - Eligible Use Category E;
(ii) Eligible Areas -Exhibit B, depending on source of funds;
(iii) Sale Price - Pass through cost of acquisition by TCC Land Bank of the
Eligible Property plus a $1,500.00 transaction fee per Eligible Property,
plus all actual out-of-pocket Activity Delivery Costs incurred by TCC
Land Bank in connection with TCC Land Bank's acquisition and closing
of the purchase of the Eligible Property under the First Look Program;
(iv) Priority - TCC Land Bank will give EDA first priority in the selection of
Eligible Properties off each First Look Program property list provided to
TCC Land Bank for acquisition; and
(v) Purchase Agreement - EDA and TCC Land Bank will enter into a
purchase agreement in substantially the form attached to this Agreement
as Exhibit F (Form Purchase Agreement) for each Eligible Property or
group of Eligible Properties that EDA, from time to time, agrees to acquire
from TCC Land Bank under this Agreement.
(b) To NSP 3 Developers:
(i) Purpose - Eligible Use Category E;
(ii) Eligible Areas- Exhibit B, depending on source of funds;
(iii) Sale Price - Pass through cost of acquisition by TCC Land Bank of the
Eligible Property plus a $1,500.00 transaction fee per Eligible Property
and all actual out-of-pocket Activity Delivery Costs incurred by TCC
Land Bank in connection with TCC Land Bank's acquisition and closing
of the purchase of the Eligible Property under the First Look Program;
(iv) Priority - TCC Land Bank will give NSP 3 Developers who are acquiring
properties from TCC Land Bank for purposes of rehabilitation under the
Foreclosure Recovery Program second priority in the selection of Eligible
Properties off each First Look Program property list provided to TCC
Land Bank for acquisition. If more than one NSP 3 Developer wants to
acquire or TCC Land Bank desires to retain an Eligible Property, a lottery
system will be used to determine which NSP 3 Developer shall acquire
such Eligible Property or if TCC Land Bank shall retain such Eligible
Property; and
EDA RESOLUTION NO. 2012-19
(v) Purchase Agreement - TCC Land Bank shall enter into a purchase
agreement with NSP 3 Developer in substantially the form of the Form
Purchase Agreement for each Eligible Property or group of Eligible
Properties that NSP 3 Developers, from time to time, agree to acquire
from TCC Land Bank.
11. Documentation. TCC Land Bank shall maintain the following records and reports
relating to each Eligible Property acquired pursuant to this Agreement: (a) appraisal, (b)
NSP 3 informational notice offer letter, (c) PTFA Certification, (d) NSP 3 Developer
Access and Indemnity Agreement, (e) environmental reports, (f) purchase agreement, (g)
settlement statement, and (h) deed document number/filing information. TCC Land Bank
shall submit copies of the foregoing documentation, except the NSP 3 Developer Access
and Indemnity Agreement, to EDA with respect to any Eligible Property transferred to
EDA pursuant to this Agreement.
will receive an
12. Program Income. The parties do not anticipate that TCC Land Bank y
"program income," as defined in 24 CFR 570.500, in connection with the transactions
contemplated by this Agreement. However, if TCC Land Bank ever receives land sale
proceeds in excess of its acquisition costs, including any Activity Delivery Costs, TCC
Land Bank may retain the program income, subject to 24 CFR 570.503 and 570.504.
13. Uniform Administrative Requirements. TCC Land Bank shall comply with all applicable
uniform administrative requirements described at 24 CFR 570.502.
14. Other Program Requirements. TCC Land Bank shall carry out the acquisition activities
under this Agreement in compliance with all federal laws and regulations described at 24
CFR Part 570, subpart K. Notwithstanding anything to the contrary contained herein,
TCC Land Bank expressly does not assume EDA's environmental responsibilities
described in 24 CFR 570.604, and (ii) TCC Land Bank expressly does not assume EDA's
responsibility for initiating the review process under the provisions of 24 CFR Part 52.
TCC Land Bank shall execute the Certification Regarding Lobbying and Certification
Regarding Debarment attached as Exhibit G in conjunction with the execution of this
Agreement.
15. Suspension and Termination. In accordance with 24 CFR 85.43, suspension or
termination of this Agreement may occur if TCC Land Bank materially fails to comply
with any term of this Agreement, after notice and the opportunity to cure, and this
Agreement may be terminated for convenience in accordance with 24 CFR 85.44.
16. Reversion of Assets. Upon the expiration or earlier termination of this Agreement, TCC
Land Bank shall transfer to EDA all NSP 3 Awards in TCC Land Bank's control or
possession, if any, and any accounts receivable attributable to the use of NSP 3 Award.
Further, any real property under TCC Land Bank's control that was acquired or improved
in whole or in part with NSP 3 Award in excess of$25,000 shall be used or disposed of
in a manner consistent with 24 CFR 570.503(b)(7).
EDA RESOLUTION NO. 2012-19
17. Notices. Any notice or demand which must be given or made by a party under this
Agreement or any statute or ordinance shall be in writing and, except as otherwise
provided in Exhibit E, shall be deemed to have been given or served on the date the same
is deposited in the United States Mail, registered or certified, postage prepaid and addressed
as follows:
To EDA: Economic Development Authority of the City of
Brooklyn Center
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430
Attn: Jesse Anderson
To TCC Land Bank: Twin Cities Community Land Bank LLC
615 First Avenue NE, Suite 410
Minneapolis, MN 55413
Attn: Sandra Oakes
18. Severability. The invalidity, illegality or enforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, all of which shall remain in full force and effect.
19. Assignment of Agreement. The parties shall not assign this Agreement without the
express written consent of the other party.
20. Modification. No provision, term or clause of this Agreement shall be revised, modified,
amended or waived except by an instrument in writing signed by both parties.
21. Countemarts. This Agreement may be executed in any number of counterparts and each
such counterpart shall be deemed to be an original, all of which, when taken together,
shall constitute one agreement.
22. Headings. The titles to the sections and headings of various paragraphs of this
Agreement are placed for convenience of reference only and in case of conflict, the text
of this Agreement,rather than such titles or headings shall control.
23. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit
of the successors and assigns of each of the parties hereto.
24. Invalidity. If for any reason any portion or paragraph of this Agreement shall be declared
void and unenforceable by any court of law or equity, it shall only affect such particular
portion or paragraph of this Agreement, and the balance of this Agreement shall remain
in full force and effect and shall be binding upon the parties hereto.
25. Governing Law. This Agreement shall be governed and construed in accordance with the
laws of the State of Minnesota.
EDA RESOLUTION NO. 2012-19
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER,
MINNESOTA, a public body corporate and politic
under the laws of the State of Minnesota
By. � rr lz2
Its.
By:
Its:
(Signature page to First Look Program Acquisition Agreement between Twin Cities Community
Land Bank LLC and the Economic Development Authority of the City of Brooklyn Center)
EDA RESOLUTION NO. 2012-19
TWIN CITIES COMMUNITY LAND BANK,
LLC, a Minnesota non-profit limited liability
company
By:
Sandra Oakes
Its: President
(Signature page to First Look Program Acquisition Agreement between Twin Cities Community
Land Bank LLC and the Economic Development Authority of the City of Brooklyn Center)
EDA RESOLUTION NO. 2012-19
EXHIBIT A
MEMORANDUM OF UNDERSTANDING WITH NCST AND
ACQUISITION PROGRAM GUIDELINES ISSUED BYNCST
See Attachment III